I’ve been in the business of writing and publishing investment advice for 35 years and over that time I’ve become a dyed-in-the wool, card-carrying optimist about the market.
The reason: Not only do I recognize that the major market trends have been up for centuries (interrupted, of course, by corrections when necessary), I also believe that capitalism, driven by the innovations of men and women who are striving to make money by satisfying the needs of the people, will continue to drive increases in value.
And in the nascent cannabis industry, I have no doubt that as federal legalization becomes a reality in the U.S. (as the people desire), the leading companies will have trajectories that mirror those of the country’s most established alcohol brands, providing decades of growth for long-term investors.
Today, however, our stocks are still stuck in the mud, with some hitting new lows, as tax-loss selling outweighs opportunistic buying and hopes for federal legalization continue to be pushed into the future.
But eventually that will change (hopefully soon, as the new year draws closer), and thus today, I’m making no changes in our portfolio.
But I do want to reassure you that patience will pay. We own all the leading companies in the industry. Revenues at our companies grew an average of 64% from the previous year in the latest quarter. And increasing numbers of our companies are reporting real profits, as economies of scale kick in.
Also, I want to reassure you that investing in these stocks directly, rather than simply buying a cannabis ETF, is the smart choice. As of today, the six largest ETFs in the industry are ALL trading at prices below their starting prices. In every year since I started this advisory in 2017, I have beaten the performance of the index I follow. And I expect to continue to do so. Since inception in August 2017, our portfolio is up 239%.
Year to date, however, our portfolio is now down 16.8%. That’s nothing to brag about, but it beats the index, which is down 29.3%!
And, of course, it’s always darkest before the dawn. So, dark as it has been for investors in marijuana stocks over the past 10 months, I am very optimistic that 2022 will bring some great profits to investors who ride our stocks back up.
And which stocks do I favor? I like the biggest, which is either Trulieve (TCNNF) or Curaleaf (CURLF). I like the fastest growing, which is Verano (VRNOF). And I like the stocks with the best charts over the past month: Green Thumb (GTBIF), TerrAscend (TRSSF) and (again) Verano (VRNOF).
Finally, unless there’s unusual news or activity, there will probably be no update next week; I hope that like me, you’ll be enjoying time with your family and friends.
But the following week will bring a regular issue, with updates on every stock in the portfolio, as we look ahead to a brand-new year.